Transcript

00:00:02

>> Apple getting tripped up with China again. In a rather bizarre turn of events, a little known tech company from southern China won a ruling against Apple for patent violation, claiming the iPhone 6 and 6 Plus infringed on its exterior design patent. And the Beijing Patent Office ordered a halt on sales of those models.

00:00:22

The story broke on Friday, but the ruling was posted in mid-May. Apple saying it has appealed the case, and for now, is able to sell those iPhones without any disruption. Still, it's spooked investors and shares are down about 2%. Reuters global tech editor, Jonathan Weber.>> But I think the movement in the stock reflects a broader concern about potential regulatory problems in China.

00:00:46

There is a feeling among some investors that there is just an inherent risk for Apple to have so much of its revenue dependent on a market that is subject to what can be arbitrary interventions by the government. And there's nervousness that the government over the long run is gonna promote Chinese manufacturers at the expense of Apple.

00:01:05

>> That's the main reason activist investor Carl Icahn said he dumped all his shares earlier this year. Apple is counting on China for its future growth, but has faced head winds there before, including its iTunes movies and iBooks recently getting blocked.>> Well certainly, Apple is acutely aware of the need to have good relations in China.

00:01:25

Tim Cook visited there recently as part of that effort. Apple recently invested $1 billion in DD, the big Chinese ride hailing company that competes with Uber. And a lot of people viewed that investment as a way of kind of currying favor with the Chinese government.>> So, in addition to reading Apple's earnings statements carefully, investors will have to read Beijing's mind as well.